Practical Tips for Analyzing Long Shorts from Volume Analysis

In spot gold trading, the party who buys the gold contract is called a long, and the party who sells the contract is called a short. Bulls usually think that the price will rise, so they choose to buy; on the contrary, bears judge that the price of gold is high and may fall in the future, so they choose to sell. That is to say, there must be both buyers and sellers in any transaction. So, how to analyze the power of long bears through the volume of spot gold? Combine some belowdecodeThe knowledge points of foreign exchange will be explained.

Specifically, the increase in spot gold trading volume means that the market turnover rate increases, the average cost of holding positions increases, and the selling pressure above is reduced, so that the price of gold can continue to rise. On the contrary, if the volume shrinks, it may indicate that the upward momentum is insufficient.

Sometimes, when the market's main chips are well locked, the price of gold may also appear to shrink and rise. However, this situation of shrinking and rising is often difficult to maintain for a long time, otherwise the average cost of holding positions cannot be effectively increased, the selling pressure increases, and gold lacks sustained upward momentum. In the trading philosophy of Decode foreign exchange, the change in trading volume is an important reference for judging the sustainability of the trend.

Therefore, during short-term operations, priority should be given to gold varieties with rising volume, especially those with signs of volume in the bottom area, which are more worthy of close attention by traders.